FX.co ★ Gold Drifts Lower

Gold prices retracted to approximately $3,360 per ounce on Monday, following a gain of over 1% in the prior session, as the U.S. dollar sought to regain strength after Federal Reserve Chair Jerome Powell's dovish shift. During his speech at Jackson Hole, Powell indicated the potential for interest rate cuts. He highlighted that although unemployment remains low, the risks in the labor market are increasing, and monetary policy is still "restrictive," suggesting that adjustments may be necessary. Market reactions were immediate, with futures nearly fully anticipating a 25 basis point cut in September. Additionally, the rising tensions between Russia and Ukraine enhance gold's appeal as a safe-haven asset. Ukrainian President Volodymyr Zelensky, in a resolute statement, vowed to continue defending the nation "until its calls for peace are acknowledged." His assertion followed Moscow's claims that Ukraine had targeted Russian power and energy infrastructures overnight, leading to a fire at a nuclear plant in the Kursk region of western Russia.